Monday, 31 December 2018

Jeff Berwick joins us from Acapulco to discuss the latest trends with the stock market, Fed interest rates, TDV Summit, and much more. Be sure to check out Anarchapulco.com and use the coupon code: cryptoThis year the line up is pretty incredible

It’s been over a year since the Cboe and CME listed the world’s first bitcoin futures contracts, the first ever bitcoin investment product to hit the legacy market. Both futures went live just before bitcoin peaked at its $20,000 all-time high. Out-the-gate trading for the derivatives reflected 2017’s market mania, and Cboe’s futures alone traded over 800 contracts (roughly $12,000,000 at the time) within the first two hours of their launch.

With the creation of these markets, the euphoric anticipation of bitcoin’s debut on Wall Street conjured up delusions of grandeur. The seemingly unstoppable asset, which had transcended all-time high after all-time high with ease all throughout the 2017 holiday season, was on the cusp of receiving its largest flush of capital yet.

Cue 2018 and the bear.

Now, bitcoin is down about 80 percent from its all-time high. Its introduction into mainstream institutional markets obviously did not send us to a new paradigm, and some in the community even believe that the futures invited the opposite effect — that they were the cause of the crash.

2018 was not the year of institutionalization that some bitcoin investors hoped that it would be. Instead, it’s been a Sisyphean struggle to give Wall Street an easier in, perhaps best exemplified by the industry’s repeated trial and failure to get an ETF approved by the United States Securities and Exchange Commission (SEC).

Still, there are a handful of outstanding deadlines and tentative launch dates that could make 2019 the actual year that bitcoin makes headway in the institutional investment scene. The products related to these deadlines include two futures offerings and VanEck’s long-anticipated bitcoin ETF.

For these products, here are some dates to look out for and a brief explanation of how they work.

Unlike current futures products offered by the Cboe and CME, which are not physically delivered and settled in cash, Bakkt’s contracts would be settled in kind with bitcoin. Originally anticipated to launch in November of 2018, the platform has been delayed until the tentative date of January 24, 2019.

Bakkt’s team delayed the launch to hammer out customer customer onboarding and work with regulators on approval. It should be noted that, as of this writing, Bakkt has not received regulatory approval from the United States Commodities and Futures Trade Commission (CFTC) to list the futures.

VanEck/SolidX Bitcoin ETF: February 27, 2019

The latest in a slew of attempts by various actors to offer the world’s first bitcoin ETF, the VanEck SolidX Bitcoin Trust is the only bitcoin ETF introduced in 2018 whose filing hasn’t been decided on by the SEC. Unlike most of its 2018 predecessors, the ETF would source its prices from the bitcoin spot market — not the Cboe and CME futures markets.

The SEC has delayed its decision on the VanEck SolidX ETF twice, but come February 27, 2018, it will have to make a decision, though in reality one could come sooner than this.

In addition to this ETF, the SEC will also have to make its final decision on nine other ETFs which, after being rejected at the staffing level, were appealed for review by the commission. At the time of publication, no dates have been disclosed for when this decision might take place.

Nasdaq’s Bitcoin Futures: Q1 of 2019

Nasdaq teased the prospect of launching its own bitcoin futures throughout 2018, and, as we head into 2019, the exchange is looking to make good on its promises.

But these promises are still a bit nebulous. The exchange hasn’t released many details regarding how the futures will operate, nor has it given much information on the launch date. We do know that their tentative launch date is expected to fall in Q1 of 2019, and Nasdaq has partnered with VanEck to source prices with VanEck’s MVIS Bitcoin Index.

Like Bakkt’s own futures, Nasdaq has yet to receive the greenlight from the CFTC to list the futures.

Thought up at a brainstorming event attended by Bitcoin developers and privacy researchers last summer, Pay to Endpoint (P2EP) is a relatively new trick that utilizes the well-known CoinJoin mixing technique to make blockchain analysis much harder. An early version of it, called “Bustapay,” was quickly implemented by independent Bitcoin developer Ryan Havar and is being tested as of now. Meanwhile, the privacy-focused Samourai Wallet as well as JoinMarket developer Adam Gibson are working on two P2EP projects of their own, which are getting closer to deployment too.

“Privacy is essential for Bitcoin,” Havar told Bitcoin Magazine. “Ideally we want to screw up [blockchain] analysis so badly, that they can't even make it.”

CoinJoin

To understand P2EP, let’s first recap what CoinJoin transactions look like, and why they are (and aren’t) useful.

Many normal Bitcoin transactions send coins from several addresses (inputs), because the sender’s addresses individually don’t contain enough coins needed for the payment. This is very helpful for blockchain spies, as it usually means that all inputs in a transaction belong to the same entity. It allows for address clustering.

But by combining several transactions into one big transaction, CoinJoin — a privacy solution first proposed by Bitcoin Core contributor Gregory Maxwell — has the potential to break this assumption. If multiple senders cooperate to create a single transaction that sends coins from all of their inputs to the different receiving addresses (outputs) they’re paying, blockchain spies would be wrong to assume all inputs belong to the same entity. As such, they can’t just assume it, even if it is a regular transaction. It would make address clustering, and thus blockchain analysis, significantly harder.

However, CoinJoin also has its limitations. If all CoinJoin participants don’t use equal amounts, it’s easy to puzzle together which inputs are paying which outputs. As such, it doesn’t really prevent address clustering after all.

CoinJoin is still useful for mixing, which can easily be done with equal amounts. Users don’t pay other users, but rather, themselves. This is effective in breaking the trail of coins, but it does give away that a mixing session took place.

“While it ‘clears your history,’ it is not as useful as people imagine,” Havar argued. “Your coins are obviously and intentionally washed. That makes it problematic to use. Try depositing your post-mixed coins into an exchange, for example, and watch when they lock your account and ask you a lot of questions.”

CoinJoin’s potential to break the assumptions used for addresses clustering had not really been realized yet. But this may be about to change.

P2EP

P2EP is a relatively new idea, first proposed by participants of a brainstorming event for Bitcoin developers and privacy researchers last summer, who published the idea in severalblogs. It cleverly works around CoinJoin’s “equal amount” limitation, opening up the possibility to use CoinJoin for regular payments — not just mixing specifically.

The central concept behind P2EP is simple yet effective: the receiving party in a payment takes part in the CoinJoin. If Alice pays Bob, Bob participates in Alice’s CoinJoin transaction to him, so he also pays himself.

Say, for example, that Alice wants to send Bob 1.2 BTC. She may send it from two inputs: one that contains 1 BTC and one that contains 0.5 BTC. This adds up to 1.5 BTC, which means she also sends 0.3 BTC back to herself as change in the same transaction.

With P2EP, Bob adds one input of his own in the mix: let’s say it contains 0.9 BTC. As such, the transaction now has three inputs worth 1, 0.9 and 0.5 BTC, for a total of 2.4 BTC. The transaction also has two receiving addresses, worth 2.1 and 0.3 BTC. The 0.3 BTC is still the same change going back to Alice, while the 2.1 BTC really consist of the original payment of 1.2, plus the 0.9 that Bob is sending himself. While the transaction has some padding, Alice still just paid a total of 1.2 BTC to Bob.

Importantly, not all inputs in this transaction belong to Alice, and it’s no longer obvious that a CoinJoin took place: there are no matching “sending” and “receiving” amounts to link addresses together.

“The on-chain structure of a P2EP payment is exactly like a normal transaction. So, at certain points, spies know their analysis is corrupted, but they don't exactly know how. Ideally, we want to screw up the analysis so badly, that they can't even make it,” said Havar.

Bustapay

Havar is the previous owner of Bustabit, an online gambling game, and has plenty of experience in the Bitcoin casino space in general. This is how he got a firsthand taste of Bitcoin’s privacy and fungibility issues: Several exchanges blacklist coins that are associated with gambling sites.

“As a casino operator, you want to help protect the privacy of your players,” Havar explained. “So I implemented a huge amount of privacy oriented features, but each time I was kind of surprised how ineffective it was. Bitcoin truly leaks a lot more information than you'd expect.”

Havar sold Bustabit earlier this year and got interested in P2EP when he read about it last summer. He got to work and first announced the Bustapay implementation in late August 2018: a basic version of P2EP.

While intentionally keeping it simple, Havar believes he has improved on initial P2EP proposals in particular when it comes to denial-of-service prevention (where someone indicates an intention to make a payment but doesn’t) and privacy (spies can use the denial-of-service trick to learn which addresses belong to the payee). In both cases, Havar’s solution lets the payee claim a regular payment if the payer bails on the P2EP payment. This makes the attacks expensive — perhaps too expensive to be worthwhile.

Havar hopes the implementation will be adopted by wallets and services, but he did note interest has been limited so far.

“I tried to reach out to most wallets — but there's largely apathy,” Havar said, realizing Bustapay suffers from a “chicken-and-egg” problem. “For any wallet developer, there's a million things to do, and who wants to implement a protocol no one supports? Meanwhile, when I talk to several big bitcoin businesses, no one wanted to implement a protocol that no wallets support.”

Still, one service has now implemented Bustapay: Bustabit, the casino game Havar used to own, and which he himself believes might even be the biggest one on the internet. To keep things moving forward, Havar put out a call for testers and even offered a small reward last week, while also proposing wallet developers should get a piece of a five-year-old “CoinJoin bounty fund.”

With these tests, Havar hopes to learn how effective the implementation really is.

“Someone with Chainalysis access is giving me information about its effectiveness,” he told Bitcoin Magazine, “so I can kind of see how well it works, and how confused it gets.”

Stowaway and Payjoin

It turns out Bustapay is not the only P2EP project.

Inspired by a much earlier idea by Maxwell to disrupt blockchain analysis, privacy-focused Samourai Wallet revealed in September it has been working on a P2EP-type of solution, too. Based on guidelines by data analyst LaurentMT, the wallet had started working on the solution even before last summer's privacy brainstorming event and has been running private tests since. Dubbed “Stowaway,” the feature will enter a public testnet phase within weeks.

Samourai Wallet’s implementation does have one big difference from Havar’s implementation, however, and will, therefore, be incompatible.

“I'm happy to see Bustapay move forward, but personally I'm a bit put off by the the lack of ‘permissions’: It grants anyone the right to obtain knowledge about part of my UTXO [Bitcoin address] set,” pseudonymous Samourai Wallet developer “Samouraidev” told Bitcoin Magazine.

Stowaway will, therefore, only work between Samourai Wallet users that have indicated through the application that they have a trust relationship with each other.

“Users have to ‘follow’ one another and, in addition to that, provide that extra ‘permission’ to allow their UTXO set to be exposed,” said Samouraidev. “For example, I might have a basic two-way relation with my employer to receive [a] salary, but I do not want my employer to solicit me for collaborative spends, which would expose my UTXO set to him.”

And just a couple of days ago, a third P2EP project was revealed. Privacy-focused Bitcoin developer Adam Gibson is implementing a solution called “Payjoin” for another CoinJoin-based privacy project: JoinMarket.

Like Stowaway, Payjoin is specifically designed to be used between users’ wallets. Where Bustapay is developed with online merchants in mind and is available for anyone that wishes to make a payment, Payjoin would only be used when two users specifically choose to do so.

“With Payjoin you're not passively waiting for arbitrary people to ping your server, so you don't have to worry about snooping attacks,” Gibson explained. “You exchange payment details and you end up with a transaction that looks like an ordinary payment.”

Having been part of the brainstorming session where P2EP was formalized, Gibson has been aware of the solution for a little while; in August, he was even among the first to explain it publicly in a podcast. But he said he’d only recently realized the full potential benefit of the trick. Besides privacy, P2EP also positively impacts Bitcoin’s UTXO set, as more unspent coins end up held by fewer addresses.

Gibson, therefore, started working on PayJoin about a week ago and said that implementing it is relatively easy, as JoinMarket wallets already communicate with one another anyway. He thinks he could have a working implementation ready to be integrated into JoinMarket within a few weeks.

“I initially kind of dismissed this idea offhand as not getting enough usage,” he said. “That's, of course, still likely true. But the main reason I decided to devote a bit of time to it in JoinMarket is everything is set up for that already: anonymised Tor connections between counterparties, encrypted messaging, etcetera. So, even if hardly anybody uses it, it acts as a showcase for other wallets and systems in Bitcoin to let them think about it.”

In a demonstration titled “Wallet.fail,” a team of security researchers hacked into the Trezor One, Ledger Blue and Ledger Nano S. Unfortunately, it appears as if their findings were first put on display at the 35th Chaos Communication Congress (35C3) in Leipzig, Germany, rather than through accepted Responsible Disclosure practices, which would have allowed the manufacturers to patch the vulnerabilities and protect their customers from any potential attack. Fortunately, the vulnerabilities appear to be very difficult for attackers to actually exploit.

The team of experts included security researchers Dmitry Nedospasov, Josh Datko and systems engineer Thomas Roth. Among the vulnerabilities revealed in the presentation were several that could have been fixed with a firmware upgrade on the hardware wallets in question.

SatoshiLabs, the manufacturers of Trezor wallets, through its Chief Technology Officer Pavol Rusnak, insisted that the company had not been notified about the vulnerabilities demonstrated at the event, going on to add that there's a "Responsible Disclosure program" that the researchers could have followed to give them a heads-up about the loopholes.

"With regards to #35c3 findings about @Trezor: we were not informed via our Responsible Disclosure program beforehand, so we learned about them from the stage. We need to take some time to fix these, and we'll be addressing them via a firmware update at the end of January."

Ledger took the same exception, claiming in a blog post to have been sidelined by the researchers, who could have notified them through a disclosure, which they claim would have given the firm the time needed "for the vulnerability to be patched as well as to mitigate risks for users."

The Vulnerabilities

As for the vulnerabilities themselves, it appears that they cannot (yet) be exploited remotely; most of them require that the intruder have physical access to the devices in question — and sometimes access to the owner’s computer as well.

At the presentation, the security experts claimed to have flashed a Trezor One hardware wallet, which allowed them to extract the mnemonic seed (and PIN) from the RAM, going on to add that the vulnerability can only be exploited against users who don't set a passphrase.

The team also claimed to have installed their firmware on the Ledger Nano S, allowing them to manipulate the wallet by signing transactions remotely. To do this, the intruder would have to physically access the Nano S and hack into the victim's PC, where malware is installed to steal the PIN once the victim loads Ledger's Bitcoin app.

Ledger claims that since this scenario requires an intruder to have physical access to the device, access to the victim's computer and the patience to wait for the victim to put in his PIN and launch the Bitcoin app on the PC, this type of attack is unlikely to pose much of a practical threat.

The security researchers also demonstrated a proof-of-concept, side-channel attack on Ledger's most expensive hardware wallet, the Ledger Blue. According to the team, Ledger Blue leaks signals sent to its touchscreen as radio waves, making them vulnerable. This is due to the animation of the PIN keyboard. The researchers claim the signal could get stronger when a USB cable is attached to the device, allowing them to sniff the PIN of the Ledger Blue remotely.

Having worked over a decade in government before becoming a commissioner to the U.S. Securities and Exchange Commission (SEC), Hester Peirce is a regulator well-versed in matters of both rulemaking and securities law.

Sunday, 30 December 2018

Micah Winkelspecht is CEO and founder of Gem, a crypto portfolio app company based in Los Angeles, The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. If 2017 was the year of irrational exuberance, 2018 became the year of reality checks when the market sputtered and crashed. I predict that this year will […]

Massimo Morini is a veteran in investment banks and financial institutions including the World Bank. Some of his research on blockchain was reported here and here. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. The end of 2018 is not the end of a year. It is the end of a decade, a decade that changed the world […]

Leah Callon-Butler is the co-founder of Intimate.io, a token project aiming to bring payments, privacy and reputation to the adult industry. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. “The stars have aligned,” he said, the room hanging on his every word. “In the same way that the industrial revolution created the […]

For investors whose first time investing in bitcoin was in 2018 or after late 2017, there is a high likelihood that they have incurred substantial losses for the fiscal year of 2018 if they haven’t sold yet. On December 17, 2017, bitcoin hit an all-time high at over $19,000. Thereafter, it has fallen over 80 percent and now hovers at around $4,000 at the time of writing. While losing money is never the end goal, there are certain measures investors can take in order to minimize their taxable income by utilizing their capital losses incurred from bitcoin during the current year and going forward.

Before diving into what measures can be taken, it is first necessary to address how the regulatory bodies who set these precedences view bitcoin and similar assets. Although this piece is centered on the U.S. regulatory requirements applied to bitcoin, it is worth noting that many other countries have similar regulations internationally.

Bitcoin Is Property

According to the Internal Revenue Service (IRS), bitcoin is considered personal property. As such, any tax laws applicable to the sale of a house or car, or more similarly, a security, will also apply to the digital currency.

Specifically, the IRS refers to taxes levied on the sale of an asset as capital gains tax, for which there are two types. Long-term capital gains tax applies to profits on assets held over a year, while short-term capital gains taxes apply to assets held for less than a year. Short-term capital gains are taxed at the same rate as an individual’s ordinary income tax rate, which in 2018 was somewhere between 10 percent and 37 percent, depending on your level of income. On the other hand, in 2018, the long-term capital gains tax rates are either 0 percent, 15 percent or 20 percent. The applicable rate used for the calculation is dependent on the level of income.

However, in this article we are discussing the opposite of gains, as there are probably very few who profited in 2018’s bear market. Capital gains tax rates are relevant to taxing profits but not losses. The good news is the IRS allows individuals to lower their taxable income by applying these losses.

If You Sold Your Bitcoin at a Loss

Plenty of people bought bitcoin during the bull run last year. Some “bought the dip” at various points on the way back down, only to see the price slide even lower. And many discouraged investors sold their BTC at a loss along the way. For those short-term investors, there is the opportunity to claim back some of those losses.

Similarly, if an investor bought bitcoin any time between late September (the last time prices were this low) and December of 2017, it is likely they have losses for 2018 that can be used to lower their taxable income if they choose to sell now. This would lower the amount of taxes they will owe from the given year, as long as the asset isn’t bought back within 30 days (i.e. wash sale).

According to the IRS, the maximum amount by which an individual can offset their taxable income for a single year is $3,000. But, if an investor lost more than $3,000, the remaining losses can be carried over to following years up to $3,000 per year.

As an example, if an investor bought 1 BTC in late December at $17,000 and sold it at $4,000 today, they would recognize a loss of $13,000. The investor, who is assumed to have regular taxable income, can reduce their 2018 taxable income by a maximum of $3,000. The remaining unused portion of the capital loss in this situation is $10,000. The IRS allows $3,000 of that leftover $10,000 to be carried over into the next year to offset any capital gains that may be recognized at the end of 2019.

The Case for Hodling

While selling bitcoin at a loss could reduce taxable income in the short term, many proponents of bitcoin would be quick to point out that the case for holding onto the digital asset is much stronger than selling for such a marginal and temporary opportunity to save a few dollars in taxes.

There are many who believe that bitcoin will eventually become a store of value, or sound money, and that the best days of bitcoin’s price are yet to come.

However, it is unpredictable when, or even if, bitcoin will accomplish this feat. Because it is impossible to predict the short-term price movement of bitcoin, it could be argued that the case for holding for a very long time (commonly referred to as HODLing) points toward a much higher future price of bitcoin that would make selling today, for a relatively small, offsettable loss, a much greater loss in years to come.

This article is for informational purposes only and does not constitute tax advice. As always, contact a tax professional to be sure that you are acting in compliance with your local tax laws.

Evan Kuo is the co-founder of Ampleforth (formerly Fragments), a startup developing advanced technological solutions for the stablecoin market, and the former founder of on-demand delivery startup Pythagoras Pizza. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. “I don’t believe we shall ever have a good money again before we take the […]

People often talk about potential uses of cryptocurrency to help the underbanked in Africa, Asia, and Latin America, but what about the Caribbean? Back during Consensus, I met with Oliver and was fascinated by his work in Barbados and other islands. There are some unique opportunities specific to the region that offer real world utility and even a stable coin! Are you as intrigued as I was? Tune into this episode of the Tatiana Show and learn more about the innovation at Bitt and the work they are doing in partnership with the local central banks and the government. No matter where you are on the political spectrum, one has to applaud the forward thinking policies that can give a competitive edge to some of the smaller countries in the world stage.

As a bonus, here is a cool music video by Oliver, really fun! https://www.youtube.com/watch?v=3QIjz4k-8vI

About the Guests:

Founder ofBitt.comandBaseTwo.com,Oliveris a global advocate on digital fiat currency and distributed ledger technology, a serial entrepreneur, and in his free time an award winning recording artist.

Championing educational and policy making discussions at the United Nations, International Telecommunications Union (ITU), Commonwealth Secretariat, Caribbean Development Bank, MIT, Columbia University, as well as numerous central bank forums and stages around the world, Oliver is a leader in the field of central bank digital currency and the development of DLT in the Caribbean. He is a member of the Financial Inclusion Global Initiative (FIGI), a Bill and Melinda Gate Foundation project launched in collaboration with the World Bank and UN to set global policy frameworks for digital currency.

In 2017 Oliver ventured seed stage project incubation and digital asset management, founding BaseTwo.com, whose portfolio includes PayMachine.io, Apereum.com and BaseTwo.Capital. Oliver previously founded CaribHash and Cryptocurrency Capital Management, respectively the Caribbean's first industrial cryptocurrency mining and private digital asset investment group. A University of Bristol alumni from the School of Economics, Finance and Management, Oliver is a seasoned crypto investor.
More Info:

'œA world of a thousand tokens is not as strong as a world with one token.'

'" Marty Bent

Interview location: Skype

Interview date: Sunday 23rd Dec, 2018

Company: Tales From the Crypt Podcast

Role: Host

What a year 2018 has been. The bear market has taken its toll on many: traders have lost money, companies such as Bitmain and Consensys are looking at significant layoffs, and the steep decline has provided the mainstream media with ammo to attack crypto.

Still, we may look back on the 2018 bear market as a good thing. Without a doubt, the majority of the crypto industry has been plagued with scams, poor projects and ideas which have raised vast sums of money and shipped little. Certain naysayers have been proven right with their criticism of Crypto, and sadly, these criticisms attack the category which includes Bitcoin.

As companies and projects close, teams face layoffs and investors lick their wounds; Bitcoin has continued to go from strength to strength. Despite the recent fall in hash rate, in 2018 it has doubled, Lightning Network continues to expand, and the user experience on wallets improves. Further, Wall Street adoption is happening, ICE is launching Bakkt in January and The SEC continues to make positive statements for a Bitcoin ETF.

In this interview, I review the year with Marty Bent: we discuss the bear market, what has been happening at Coinbase, the growth of stablecoins and what has happened for Bitcoin.

Thursday, 27 December 2018

Ian Simpson is chairman of communications at the Crypto Valley Association, an organization that supports the Swiss blockchain sector. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. “Grin and bear it,” they say. And in the current crypto market conditions, many people, on all sides, are “bearing” it, most without any grin […]

India could be making a U-turn on its directives for cryptocurrencies. Per reports from the New India Express, a second interdisciplinary committee set up by the Indian government is considering making cryptocurrencies legal in the country again but with more stringent rules.

This revelation comes just a few months after a government panel suggested the creation of a new regulatory framework within the Reserve Bank of India (RBI) that bans digital assets and declares crypto transactions illegal in India.

According to an unnamed senior official who spoke with the New India Express, the committee had met twice, but deliberations were still ongoing.

“We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on. We will have more clarity soon.”

The first interdisciplinary committee on cryptocurrency was set up by the government of India back in March 2017, including Ministry of Finance officials. This committee consisted of various banking and state departments. Following a recommendation from the committee, the RBI directed all banks and other financial entities in the country to refrain from transacting with digital assets.

However, the second committee, which was convened by Subhash Chandra Garg, the Secretary of the Department of Economic Affairs, was set up to review the resolutions of the first and look into the viability of cryptocurrencies for the Indian economy.

Some members of the second committee also attended the G20 summit in Buenos Aires, where crypto measures such as taxation and increased regulation to combat the use of cryptocurrencies for money laundering were discussed.

The members will be meeting in January to discuss some of the insights gained from the summit, before presenting its recommendations to the government.

“We have also taken inputs from cryptocurrency exchanges and experts and will be examining legal issues with the law ministry. It’s a complicated issue. Once all aspects are decided, then we will have more clarity,” the senior official explained in the report.

While the committee might suggest softening the stance on cryptocurrencies, local government authorities have not been handling the sector with kid gloves since the ban was enforced.

Earlier this year, the developers of India's first bitcoin automated teller machine (ATM) and the founders of the country's first crypto exchange, Unocoin, were arrested by local Bangalore authorities on criminal charges, including criminal conspiracy, cheating and forgery.

Zachary Fallon and James Blakemore are securities law attorneys who lead Ketsal Consulting, a strategic advisory firm focused on blockchain compliance. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. If the top cryptocurrency story of 2018 was the arrival of winter, a close and inextricably intertwined second was regulatory oversight. The regulators are in […]

Luís Augusto Schiavon Ramos, known as Guto Schiavon, the founder of one of Brazil’s largest bitcoin exchanges, was killed in a car accident in Sao Paulo.

A report by local Brazilian news outlet revealed that the accident happened after Schiavon lost control of his vehicle in the rain, before hitting a cargo truck.

Prior to his death, Schiavon was the founder of Foxbit, one of the largest cryptocurrency exchanges in Brazil.

The exchange was launched back in 2014 as a result of a partnership between FoxBit Serviços Digitais and BlinkTrade Inc., a technology provider, and it rose rapidly among the ranks of bitcoin exchanges in Brazil. The Foxbit team has been commended on its work to help give Brazilians a working knowledge of cryptocurrencies.

“We are a family united for an objective: to revolutionize the financial market and to contribute to the growth of the crypto-economy,” Schiavon wrote in his personal bio page on the Foxbit website.

In a statement, Foxbit described Schiavon as an instrumental figure that helped the company to grow into "the largest exchange of Bitcoins in Latin America with more than 400,000 clients and R $ 5 billion transacted."

"We communicate with deep regret the death of the founder and director of Foxbit Operations, Luís Augusto Schiavon Ramos, Guto, at the age of 24, on the afternoon of this Tuesday, December 25th, a victim of an automobile accident on the João Ribeiro de Barros -294), in Marília (SP)."

Before the death of Schiavon, Foxbit had its fair share of challenges in 2018. Back in March, the exchange's servers were infected with a bug that allowed users to duplicate their withdrawals, leading to a downtime of 72 hours and a loss of 30 BTC.

Foxbit has also had to fight against oppressive behavior from the financial sector, alongside other Brazilian-based crypto exchanges. One of the country's most prominent exchanges, Mercado Bitcoin, filed a lawsuit against the Itaú Unibanco for closing its bank accounts abruptly. The bank had noted that the company's accounts were opened without adhering to the country's anti-money laundering (AML) and know-your-customer (KYC) regulations. As such, they had the power to discontinue the accounts. The Superior Court of Justice, the second highest court in the country, noted in a landmark judgment that financial institutions have the right to close cryptocurrency-related accounts without explanation.

The Chinese crypto mining company Bitmain has apparently been hit hard by the bear market and is looking to sack more than half of their entire workforce.

Credible rumors of this story first began to circulate on Maimai, China’s equivalent to LinkedIn, as anonymous sources on a site frequently used by Bitmain employees began reporting that the company was looking at massive layoffs in the next several days. Some reports were even claiming that the company was looking to shed 50 percent of all employees. These rumors first began to circulate on December 22, 2018.

The very next day, Samson Mow, the chief security officer of Blockstream and CEO of Pixelmatic, began to post more evidence of these layoffs from Chinese sources. He tweeted a series of messages from employee conversations, which claimed that Bitmain had just laid off its entire team for Copernicus, a Bitcoin Cash Go client.

Bitmain has recently fallen onto especially hard times with the recent crypto crash, so it is more than plausible that they would begin cutting back on their operations in a large way. Just weeks prior, for example, Bitmain was forced to shutter all operations in the entire state of Israel, which had been active since 2016. Still, the shutdown in such a peripheral sphere as that pales in comparison to some of the rumors that have circulated about Bitmain’s main offices.

After these rumors first began circulating, an anonymous source within the company confirmed that Bitmain was going to begin the process of much more serious layoffs. Cutting back on foreign offices or new software development would not be sufficient to keep the company solvent, as it is apparently struggling to remain afloat.

A point of interest to several of these reports is that Bitmain was allegedly attempting to conduct layoffs on a grand scale before Christmas. In light of media coverage of the first set of rumors, Mow’s sources said on Christmas Day that the company was looking to drop all non-essential employees. The initial reports of 50 percent of the workforce being sacked are now looking exceedingly conservative, as new reports claim that up to 85 percent may be shown the door.

Bitmain responded to these allegations in Chinese media sources, claiming that “this is a normal staff adjustment at the end of the year based on business development.”

Kyle Samani is a Managing Partner at Multicoin Capital, a thesis-driven cryptofund that invests in tokens reshaping entire sectors of the global economy. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. Over the last 20 years, a lot of companies have built large online marketplaces to connect buyers and sellers. Amazon, eBay, […]

Wednesday, 26 December 2018

While at LaBitConf in Santiago Chile I caught up with 4 of the speakers for the conference to discuss a whole host of issues in the crypto space today. Joshua Scigala of VaultOro discusses the latest in gold and silver meets crypto exchange.Then Peter Kroll creator of BitAddress.org the first off-line storage for Bitcoin discusses that project and his thoughts on much more in the crypto space.Pamela Morgan joins us next to talk about her book Crypto Assets Inheritance Planning and the importance of proper key management.Finally we wrap up with Guillermo Goncalvez of a new Venezuelan crypto exchange called Eldorado. We also discuss alot of the other issues with the Venezuelan economy and politics.

Lending is one core pillar of the economy, enabling one person or company to be entrepeneurial with someone else's capital. However, in the traditional banking system processes in lending are often opaque and the barrier to entry into this market is high. The emergence of easy to use Decentralized Finance is one of the hallmarks of 2018: To date, DeFi has brought us crypto-collateralized stable coins, decentralized exchanges, tokenized credit default swaps, trustless derivatives, and decentralized margin lending.

We're joined Nadav Hollander, co-founder and president of Dharma. Dharma is a decentralized protocol for credit products which connects debtors with creditors through a transparent mechanism. The protocol itself is agnostic towards the collateral and terms used, however, the team recently introduced a crypto-collateralized margin lending application running on top of the Dharma protocol, Dharma Lever.

Topics discussed in this episode:

Nadav's background and how he became interested in both blockchain technology and debt

The vision behind distributed lending

The mechanics of the Dharma protcol

The role of underwriters in the Dharma protocol

Dharma lever, an application for margin lending on the Dharma protocol

Dharma's business model

The future of decentralized finance

Links mentioned in this episode:

Sponsors:

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Months after it filed an application to go public on the Hong Kong Stock Exchange, Beijing-based cryptocurrency mining giant Bitmain is undergoing a series of business changes that extend even to its China offices, the company confirmed Tuesday. “There has been some adjustment to our staff this year as we continue to build a long-term, […]

Sheila Warren is head of blockchain and distributed ledger technology at the World Economic Forum. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. After about a year of market upheaval, a few things seem clear: blockchain technology is still best-suited to core use cases involving needs like censorship resistance, and a lot […]

The price of bitcoin is back above $4,000, and is eyeing a move upwards. The world’s largest cryptocurrency by market capitalization had been trapped within a symmetrical triangle, suppressing its range between $3,788 and $4,153 over a period of four days, that is, until it broke out above $4,200 at 12:40 UTC today. At press […]

Sunday, 23 December 2018

When it comes to analyzing markets, developing your own trading style can be the difference between a successful trade or financial pain. Traders utilize a variety of indicators in order to add layers of confirmation to their bias in order to get the most accurate results. But what if you could only choose one indicator to […]

Saturday, 22 December 2018

The questions on ethereum the CFTC put to the public show that the regulator has been considering derivatives on cryptocurrencies other than bitcoin - they also point to a new collaborative approach to sector oversight.

Friday, 21 December 2018

Today's show is a collection of interviews from Oslo Norway and Santiago Chile. First up is Collin Cantrell of Nexus Earth discussing the BCH fork drama and the latest with Nexus roll out of Tritium their smart contract solution to ethereum. Next up is Rob Viglione with Horizen to talk about there re-brand from ZenCash as well as their Super Node service. Finally we wrap up with Rod Rambrissi of Dash Brazil about his documentary he shot in Venezuela about the boom of crypto use by Venezuelans with a focus on Dash. Rod was invited to Venezuela by Eugenia Alcala of Dash Venezula for a tour of their success thus far.

Ah, the frustrations of economics and new crypto folks. Look, I love when eager people get into the space, but I can't help but get a bit upset when they don't have the critical understanding of economic underpinnings needed behind their suggestions to help the world.

This is the difference between most well intentioned folks who end up with Venezuela, and the enlightened ones (kidding) that have studied a bit of Mises or Rothbard. So in this episode, I have to bring out the big guns. Bob Murphy, economist, karaoke king, and of course, a good friend that knows how to explain boring stuff in a fun way! Want to learn why OG crypto enthusiasts make a face when talking about the Fed or the Great Depression? Check out this episode!

Also, be sure to visit us on theContra Krugman Cruiseand use the coupon code "TATIANA" to get a free album download!

About the Guests:

Robert Murphyis a research assistant professor at the Free Market Institute.

Dr. Murphy earned his B.A. in economics from Hillsdale College and his Ph.D. in economics from New York University. Prior to joining Texas Tech University, he was a visiting assistant professor at Hillsdale College, a visiting scholar at New York University, a research analyst at Laffer Associates, and a senior fellow with the Pacific Research Institute.

He is currently Senior Economist at the Institute for Energy Research, where he writes a frequent column on the economics of climate change. Dr. Murphy also serves as a senior fellow with the Fraser Institute, a senior fellow with the Mises Institute, and a research fellow at the Independent Institute.

He and best-selling author Tom Woods also host a weekly podcast,Contra Krugman, in which they critique theNew York Timescolumn of economist Paul Krugman from alternative economic perspectives.
More Info:

A temperate climate helps to keep mining equipment cool, and plentiful renewable energy from hydroelectric dams gives Canadian provinces like British Columbia a natural advantage with cheaper electricity costs.

B.C. is sitting on a large surplus of hydroelectric energy, as depleted resources have resulted in the closures of many pulp and paper mills and traditional mines. The power surplus is also a result of the success of alternative energy and energy conservation initiatives.

Consequently, the B.C. government’s energy arm, BC Hydro, is actively looking for new businesses, including bitcoin miners, to take up the slack and help revive stricken resource towns, and it has proposed a discounted energy rate as an incentive.

BC Hydro, a B.C. government Crown corporation, is a leader in green energy programs in Canada.

Scott Howard, CEO of Toronto-based Full Stack Capital, told Bitcoin Magazine that he is encouraged by the B.C. proposal and that the province is a leader in alternative and green energy programs.

“BC Hydro and B.C. in general set the pace for public sector innovation in Canada. This is good news both for energy conservation and for bitcoin mining’s environmental footprint.”

He added, “Bitcoin mining as a base load strengthens the power grid. Effective power generation and distribution requires a stable base load that digital mining can provide.”

BC Hydro’s business development manager, Dina Matterson, said at an energy conference recently that half of the new inquiries the Crown corporation is getting are from the crypto-mining industry, and it is estimated that the inquiries could drum up 5,000 megawatts in new energy demand.

Matterson said they will be submitting a proposal in early 2019 to the British Columbia Utilities Commission, which regulates BC Hydro, for a “load attraction rate,” an initial discount on electricity for new corporate customers, including cryptocurrency companies.

“This rate would help BC Hydro compete with clean jurisdictions that have lower power rates than us,” she told the conference participants. “We need to get in the game.”

The B.C. government hopes to connect the lumber, pulp and paper, and traditional mining companies, which have invested in generating substations and transmission lines, with new bitcoin mining startups that would rent these power utilities at reduced rates.

For example, bitcoin miners in Ocean Falls, B.C., are successfully using previously abandoned power-generating stations and transmission lines, and a new bitcoin mine is under development in Houston, B.C., a once-thriving lumber town.

To date, BC Hydro has provided bitcoin miners with six megawatts of power, although the utility believes there are many more crypto miners operating in the province.

B.C.’s attempt to lure cryptocurrency entrepreneurs to make use of its abandoned infrastructure and surplus power resonates with global trends that signal an uptick in cryptocurrency mining.

A recent report from the University of Cambridge Centre for Alternative Finance flagged the exponential increase in crypto-mining operations around the world in 2018.

China remains the top country to host mining farms, but the U.S. and Canada have witnessed a rapid growth of mining-farm openings over the past year, often associated with the availability of cheap hydroelectric power, says the report.

Ameer Rosic, CEO of Toronto-based Blockgeeks, is enthusiastic about the future of bitcoin mining, especially in the Canadian setting, telling Bitcoin Magazine:

“Since the beginning Canada has been at the forefront of Bitcoin. I think the timing couldn’t be better for Canada to attract more bitcoin miners. B.C. has very affordable electricity and the cost of ASICs has decreased tremendously. This is a golden opportunity to stimulate local economies and put Canada as a leading player in the bitcoin mining space.”

Despite the market downturn in digital asset values, cryptocurrency automated teller machines (ATMs) are still in vogue. According to a tweet from cryptocurrency analytics firm DataLight, the number of crypto ATMs doubled in 2018 from 2,025 ATMs in 2017 to 4,051 ATMs, signaling an increase in the adoption of cryptocurrencies in general, despite the slump in price.

November will go down as a month investors won’t forget in a hurry, as bitcoin, along with the rest of the cryptocurrency market, experienced a massive slump in prices. Bitcoin, the dominant cryptocurrency, fell to $3,750 in November, as the market witnessed massive selloffs that would have bitcoin touch nearly $3,000 in December.

Data from Coin ATM Radar shows that while 68 bitcoin ATMs were closed in November, 209 new machines were also installed by operators all across the world. Bitcoin of America led the way, introducing 16 new ATMs, followed closely by CoinFlip Bitcoin ATMs and Localcoin, who installed 10 and 7 new ATMs, respectively.

While the U.S. remains the dominant country with 70 new installations, Peru, Albania and South Korea had their first bitcoin ATMs installed in November, the data from Coin ATM Radar revealed.

Bitcoin ATMs have also been a target of criminals. Security researchers at Trend Micro discovered malware that targets a service vulnerability in bitcoin ATMs, selling for $25,000, in an underground forum.

A senior researcher at Trend Micro, Fernando Mercês, commented on the vulnerability in his report, criticizing bitcoin ATMs for their lack of security standards, which make them easy to hack.

“Unlike regular ATMs, there is no single set of verification or security standards for Bitcoin ATMs. For example, instead of requiring an ATM, credit, or debit card for transactions, a Bitcoin ATM involves the use of mobile numbers and ID cards for user identity verification.”

They might not be as secure as traditional ATMs, but they are still finding meaningful uses cases across the world.

Bitcoin ATMs and Cannabis

While providing an easy avenue to trade bitcoin, these crypto ATMs have also created a channel for pot companies that are experiencing banking restrictions.

Bitcoin ATMs have made it easier for pot companies to receive payments from customers, thereby reducing their dependencies on cash. Cannabis cryptocurrency PotCoin also partnered with bitcoin ATM provider GENERAL BYTES (GB), making use of GB’s network of crypto ATMs to ease the transaction process for cannabis vendors.

Virtual Crypto Technologies also developed a proprietary crypto payment solution for cannabis dispensaries that enables them to exchange pot for bitcoin using a QR code placed on the shop’s point-of-sale interface.

'œBitcoin is for all of humanity, it is the greatest technical innovation when it comes to sound money.'

'" Trace Mayer

Interview location: Skype

Interview date: Monday 17th Dec, 2018

Company: Premier Ark LLC

Role: Manager

Own your private keys! OWN YOUR PRIVATE KEYS!

How many times are people told to make sure they own their private keys and not risk holding their Bitcoin on an exchange but they still do? Bitcoin offers people the chance of financial self-sovereignty but yet too many leave their Bitcoin on an exchange, exposing themselves to the risk of hacks, confiscation and exit scams.

Trace Mayer is attacking this problem head-on with his campaign Proof of Keys, where he is encouraging everyone to take their Bitcoin off-exchange on January 3rd, the 10-year anniversary of the launch of the Bitcoin protocol.

Trace rightly points out that there are many new entrants to Bitcoin who aren't aware of what happened with Mt. Gox as well as the other countless exchange hacks. In this interview, we discuss the campaign, but we also discuss why Bitcoin is important, Austrian Economics and The 7 Network Effects of Bitcoin.